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A-B's Return to NFL Signals Bet on Big-Event Sponsorships

With MLB, PGA, NBA Deals, Brewer Blankets Sports-Marketing Playing Field

NEW YORK (AdAge.com) -- Anheuser-Busch has, in recent years, walked away from a $20 million deal to be Nascar's official beer because it said the money was better spent online; surrendered exclusive beer-sponsor rights with many major sports properties; and sold itself to one of the corporate world's most notorious cost-cutters. Given that, many observers concluded that the brewer's days of shelling out huge sums to lock opponents out of key sports deals were coming to a close.

Those observers, it turns out, were wrong.

A-B last week outbid MillerCoors to make its Bud Light brand the official beer of the National Football League beginning in 2011, reportedly shelling out significantly more than the $500 million, five-year commitment its rival inked in 2005. That MillerCoors pact reportedly included a $30 million "rights fee" that is said to have doubled under the new agreement.

And, only a day earlier, A-B renewed Michelob Ultra's deal as the PGA's official beer.

The upshot: By next year A-B will be the official beer sponsor of the nation's top four team sports, the NFL (as well as its Super Bowl broadcast and 28 of its 32 teams), the National Basketball Association, Major League Baseball and the National Hockey League, as well as the PGA, LPGA, Major League Soccer, UFC, the AVP Tour and the U.S. Olympic Committee. And, as if that weren't enough, parent Anheuser-Busch InBev is the official beer sponsor of this summer's World Cup, an event that will be viewed by half the world's population.

The NFL deal alone figures to significantly boost A-B's sports-sponsorship outlay, which was already the fourth-largest in the U.S. last year, according to IEG, which estimated that the brewer spent between $205 million to $210 million on sports sponsorships in 2009, a slight drop from the $220 million to $225 million it shelled out a year earlier. These figures do not include measured-media spending around the events.
That sort of big-platform dominance is a throwback to A-B's glory days in 1980s and '90s, when it aggressively accumulated and locked down sports properties as it built a massive market-share advantage. "That's what worked [then]," said Benj Steinman, publisher of Beer Marketer's Insights. "The question is, will it work now? And at what cost?"

'Special platform'
In an interview, A-B President Dave Peacock said the brewer's cutbacks in recent years were designed, in part, to "rebalance our portfolio" to allow the brewer to "go big on something like this."

Mr. Peacock said the NFL deal was a "special platform" that frequently produces games that amount to seven or eight of the year's 10 most highly rated TV programs. And, as the national obsession with football grows, it's become an increasingly year-round stage, too. For instance, Mr. Peacock said even he envisioned the first round of the NFL Draft -- which drew 7.2 million viewers this year after it was moved to prime time -- as the "kickoff to the summer selling season."

But, at the same time, the platform isn't exactly exclusive. Coors Light and Miller Lite will continue to run ads in heavy rotation during games, although those spots won't be able to make use of the league's logos and game footage.

Mr. Peacock said that is an obstacle to doing compelling creative. "It does make it more difficult to connect when you can't leverage [footage and logos]," he said. "It also creates a lot of opportunities in digital, especially through fantasy football," an area where MillerCoors has been far more aggressive than A-B to date.

"The sports leagues are getting more and more sophisticated, and that makes it harder to ambush," said Mr. Peacock, who said that was part of the rationale for A-B collecting "official beer" status with so many leagues.

Mr. Peacock wouldn't go so far as to say A-B erred in walking away from its status as the NFL's official beer in 2002, but there's little question the move created a major opportunity for Coors Light, which has had the best growth trends among major premium light beer brands in recent years.
"It's disappointing to lose it," said one major-market MillerCoors distributor.